Rand Paul’s SOTU response: The day of fiscal reckoning is here

posted at 4:15 pm on January 26, 2011 by Allahpundit

Good stuff, albeit understandably similar to Ryan’s speech last night, right down to the setting and studiously soft-spoken delivery. Even so, I want to promote it as a way of patting him on the back for floating his proposal for $500 billion in cuts this year. That plan is dead on arrival, needless to say, but passing it isn’t what Paul is after. What he’s trying to do with that eyepopping number is communicate the magnitude of the problem to the public in hopes of moving the Overton window on spending — because if this new Gallup poll is right, it’s going to need a lot of moving. And not just among Democrats, either:

Not a single point’s worth of difference between Republicans and Democrats on Social Security despite fiscal responsibility having rocketed to the top of the conservative policy agenda over the past two years. I don’t know how else to account for that except as a near-catastrophic failure by prominent Republicans to explain even to their own base that eliminating earmarks and cutting NPR’s funding and canceling a pie-in-the-sky defense project or two isn’t remotely equal to the task of guaranteeing sustainability. Case in point: Not only didn’t Ryan squarely address Social Security and Medicare last night (“the politics of evasion,” Ross Douthat calls it) but even a fearless deficit hawk like Paul, speaking only to an online audience, didn’t go after them here. Anyone who’s serious about balancing the budget long-term must support entitlement reform, no matter how unpleasant the prospect might be, but rarely does the public hear that point made by a prominent politician. And the entirely predictable tragedy of last night’s SOTU, as Tom Coburn argued in his op-ed this morning, is that only leadership from the most prominent politician of all is realistically capable of moving public opinion on this — yet that leadership was almost entirely absent last night. Writes Yuval Levin of the missed opportunity, “This speech was worse than bland and empty, it was a dereliction of duty.” And here’s Matt Welch:

[T]he president, though he is much more serious on this issue than a huge swath of his political party, is nonetheless not remotely serious about this issue. Vowing to cut $400 billion over 10 years (a plan that, judging by the two people clapping when he proposed it, will likely be cut to ribbons if it survives through Congress), at a moment when the deficit for this year is more than three times that, indicates that Democrats (and a helluva lot of Republicans as well) are hunkering down in our awful status quo–half-heartedly tinkering around the edges of spending, making incremental changes this way and that, then launching new moonshots and redoubling old impotent efforts. Politicians have put us on the precipice of financial ruin, and they show no indication of doing a damned thing about it.

And I think they know it. Look at the plaintive, semi-desperate, Stuart Smalleyesque mantra Obama kept repeating at the end: “We do big things.” By his insistence his anxiety shall be revealed. We don’t do big things, America, not in the moonshotty Marshall Plan way of speechwriters’ cliche box. Increasingly, we don’t do little things, either–like keeping libraries open five days a week in California. What we do is snarf up ever-larger portions of your grandkids’ money for purposes that are usually obscure and often criminal.

Read his whole post, including and especially the concluding line. Just as I’m writing this, and as a prelude to Paul’s video, the AP is across the wires with news from CBO that its projections for Social Security were wrong: They used to believe that the program wouldn’t start running permanent deficits until 2016, but it turns out the deficits will begin this year. (We’ll likely have a separate post on that later.) Like Paul says, the day of reckoning is at hand.

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Not a single point’s worth of difference between Republicans and Democrats on Social Security despite fiscal responsibility having rocketed to the top of the conservative policy agenda over the past two years.

And the entirely predictable tragedy of last night’s SOTU, as Tom Coburn argued in his op-ed this morning, is that only leadership from the most prominent politician of all is realistically capable of moving public opinion on this

If Obama won’t lead, someone from the GOP will have to fill the void. The only ones I see who are willing to step up are Ryan, Christie, and Palin. I hope a combination of those 3 are on the ballot in 2012.

Not a single point’s worth of difference between Republicans and Democrats on Social Security despite fiscal responsibility having rocketed to the top of the conservative policy agenda over the past two years.

Some putz commenter here at HA and I got into this very point – he, a “conservative,” arguing that he’s not settling for one nickel’s less than what he’s got coming to him.

My point: the kids who will inherit all of this debt had no vote in the matter while our generation’s politicians were voting to spend spend spend. It’s our problem, not theirs, and to insist on keeping all the SS you can get is simply immoral – much less “conservative.”

Decades of the left’s holier than thou attitude that anyone who doesn’t support their favorite giveaway is going to come to an end. And it will come when the Communists tell us that our social programs are too spendthrift and they aren’t lending to us any more.

Not a single point’s worth of difference between Republicans and Democrats on Social Security despite fiscal responsibility having rocketed to the top of the conservative policy agenda over the past two years.

I’m trying to think of something more depressing. Nope…can’t come up with anything.

Cutting the 2% from the tax levee this year presumably sped up the problem.

Means testing is the solution for entitlements. It sounds like a lefty approach, but we have delayed so long that now we have only two choices– Cut benefits or raise taxes by a staggering amount on the innocent youngsters who did not vote the benefit levels. The Republican answer is cut benefits the sensible way to cut is via means testing reductions.

Not only didn’t Ryan squarely address Social Security and Medicare last night (“the politics of evasion,” Ross Douthat calls it) but even a fearless deficit hawk like Paul, speaking only to an online audience, didn’t go after them here.

In his interview with Larry Kudlow yesterday, Rand said he was going to propose a plan to balance the budget, and that his proposal for $500 billion in cuts to discretionary spending was the first piece. Presumably that means we can look forward to a plan from him addressing mandatory entitlement spending in the near future.

Anyone who’s serious about balancing the budget long-term must support entitlement reform, no matter how unpleasant the prospect might be

Allah, I disagree. The easiest (and probably most palatable) solution is for both parties to say “if you are over (insert age here — maybe 18?? maybe age 1???), nothing will be touched. but for all those born after 20xx, you will be given a choice: pay for 10 years into the system and you won’t get a dime back to ‘help your country’, and in return have 0 social security taxes after age 35, or choose to be on social security but you have FICA taxes till you retire at 70.”

If it’s framed as “cuts for everyone!” well that sucks because it’s not “OUR” fault the country is in such bad shape. If it’s framed as something (like the bargain i list above) that “future generations” will just have to live with, I see no problem in making that sale….

Where am I wrong? saying “SS cuts start in 2015!” is a political loser, whereas saying “SS cuts don’t *start* until 2080” is the only way we will get through this….

All of these analysis pieces worrying the data over the federal budget deficit and the federal debt always offers up a simplistic solution, when the real world solution requires three things to change all at the same time; lower tax rates, lower federal spending, and less government interference in the economy.

Change any one, and only one of those three, and it’s never going to be enough.

Of course, all the experts will immediately object, saying it is not possible to do all three. All of the experts are also democrats who don’t want anything done to fix this problem.

With all due respect and in the nicest of ways, I must disagree….
WE’RE NOT PAYING INTO ANYTHING! It is a tax (wealth transfer) to support the older generation. There is no magic kitty. It is a Ponzi pyramid. So, really no one is paying the SS taxes for ‘fun’. The simple fact is that we have people that insist that SS is like some magic savings account that you can withdraw once you hit a certain age. That is how it may have been sold, but that is not reality…and too many conservatives even think this. We must change the attitudes to have any chance of changing the culture of entitlements. That is why I grow tired of the attitude, b/c it is one of entitlement. My 2 cents…..

Until the political class has to suffer the consequences of these irresponsible spending levels they won’t change. We have become too dependant on government exactly as Cloward & Piven planned and now no one has the leadership ability to reverse course and start correcting the downward spiral.

Look, even people who self identify as conservatives will say that we need to “reform entitlements” in one breath, but then insist that Social Security and Medicare are not entitlements. Irrational, and cutting them significantly without bipartisan cover is political suicide.

Same goes for internet conservatives crying for the abolition of the Department of Education, for example. Political suicide since the average voter will read that as being “against Education.”

Somebody must do the dirty deed, I dont know where or how, but it needs to be explained with visual aids what a cluster fark we are in. And how doomed SS and MC is.Buy a couple time slots in the superbowl for all I care.

In contrast, all President Obama is offering is to freeze government spending for the next five years. The Obama administration is sleepwalking America towards long-term economic decline by saddling future generations with a burden of epic proportions. The brutal truth remains that the Obama presidency does not have a plan in place to eliminate the deficit, and continues to be wedded to an outdated, Big Government mentality that will ultimately bankrupt the world’s only superpower unless it is dropped. America needs more economic freedom, less government intervention, and a dramatic cut in government spending to avert an impending crisis. Barack Obama however remains in a dangerous state of denial and continues to move in the opposite direction.

You’re young,aren’t you? Maybe after paying for 50 years you would feel differently.

katy the mean old lady on January 26, 2011 at 4:49 PM

Yes, I am under 40. And I understand how our seasoned citizens feel. But that doesn’t change the economics. I have resigned myself to the fact that despite paying a lot of tax “into the system”, I will not receive a dime. And I am OK with that. I am planning for my retirement by investing. And I never would endorse yanking the carpet out from under people over, say 55 or something. But for those my age and younger, I have proposed that we basically say…”You’re own your own for your retirement funding”. Honor full benefits for our retired and then start decreasing funding as the age decreases. But one way or another, we must separate emotion from economics and understand that SS is not sustainable. Doesn’t that seem reasonable?

With all due respect and in the nicest of ways, I must disagree….
WE’RE NOT PAYING INTO ANYTHING! It is a tax (wealth transfer) to support the older generation. There is no magic kitty. It is a Ponzi pyramid. So, really no one is paying the SS taxes for ‘fun’. The simple fact is that we have people that insist that SS is like some magic savings account that you can withdraw once you hit a certain age. That is how it may have been sold, but that is not reality…and too many conservatives even think this. We must change the attitudes to have any chance of changing the culture of entitlements. That is why I grow tired of the attitude, b/c it is one of entitlement. My 2 cents…..

search4truth on January 26, 2011 at 4:36 PM

dude, i agree with you that the attitudes must be changed.

but i’m saying it was *SOLD* as individual retirement accounts. you aren’t going to get the current population to change their minds overnight.

hence, i say start with the generation that hasn’t been born yet. make them pay 10 years for fun, and then they don’t pay any more taxes and are responsible for their own retirement — but they also get no SS. use the ’10 year of payment’ taxes to fund the outstanding SS liabilities + the existing (shell of its former self) SS that would exist for the poorest.

but you can’t do it with americans already alive and working.

you’d have to start with “if you are born AFTER 2011, here is your choice: ”

Yes, I am under 40. And I understand how our seasoned citizens feel. But that doesn’t change the economics. I have resigned myself to the fact that despite paying a lot of tax “into the system”, I will not receive a dime. And I am OK with that. I am planning for my retirement by investing. And I never would endorse yanking the carpet out from under people over, say 55 or something. But for those my age and younger, I have proposed that we basically say…”You’re own your own for your retirement funding”. Honor full benefits for our retired and then start decreasing funding as the age decreases. But one way or another, we must separate emotion from economics and understand that SS is not sustainable. Doesn’t that seem reasonable?

search4truth on January 26, 2011 at 4:57 PM

you’re missing the point. you are right but NO ONE and i mean NO ONE alive today will sign up for voluntary forfeiture of SS.

so just start with the next generation. tax them for 10 working years and then set them free. keep this plan in place until SS is ‘paid off’ so to speak. see my post at 458 above

A. I (perhaps fortunately?) have NO savings or investments to lose – we live on what we can earn and currently carry NO credit (except for a mortgage)
B. I’m not counting on NOR expecting a DIME from the 45 years I’ve paid into SS
C. “Retirement”? What does that mean? It certainly holds no meaning here – I’ll be working until I cannot crawl up in this chair and manage movement of freight.

Apparently Seenyore Denninger was also highly UNDER impressed by the SOTUS er wheelbarrow of DUNG

I’m Stunned

Really.

THAT passed as the “State of The Union”?

Trying to channel REAGAN?

You gotta be kidding me.

Addressing things? Where? Freezing discretionary spending? That’s 12% of the budget – on a good day, more like 8% if you’re honest. Note – no actual reductions.

And no touch on any of the entitlements, no touch on the military, no solution for energy.

I’m 36, have worked since I was 17, and will continue to work the rest of my life. I’m not alone among my generation when I say I would gladly opt-out of Social Security right now, expecting nothing from it upon retirement, if I could have the money that would go into SocSec to invest privately.

For some reason, no one is even suggesting that, though. Why? Because every generation that’s come before mine feels entitled to it. Anyone under the age of 55 who believes they are entitled to get what they paid into Social Security is either a Utopian or a moron, probably both. Yes, the money was taken without your say – welcome to America.

Another way to put it: when your basement’s flooding, the first thing you do isn’t to call the plumber, the first thing you do is to turn the damn water off. Every dime of my money that goes into SocSec is wasted, and it will continue to waste away because Democrats have been using it to scare seniors and demonize GOPers since it started.

The “bond vigilantes” will have to strike us and cause a bigger crisis before people will begin to get it. As it sits now, the public won’t support meaningful cuts, over even a gradual plan like Ryan’s. We’re screwed.

I’m 36, have worked since I was 17, and will continue to work the rest of my life. I’m not alone among my generation when I say I would gladly opt-out of Social Security right now, expecting nothing from it upon retirement, if I could have the money that would go into SocSec to invest privately.

For some reason, no one is even suggesting that, though. elcapt on January 26, 2011 at 5:15 PM

Actually, Bush suggested exactly that and got pilloried for it.

When I was your age, I would have loved to have that money to invest or even just put in a stupid savings account! Now that I am able to collect, it’s a joke. I will never recover what I contributed unless I live to 100.

The amount is nothing anyone could live on anyway, so I see no problem at all with privaqtizing or pushing the age to 65 or 70 for those not already receiving their pittance.

It’s an aging Ponzi scheme, pure and simple, that has reached and exceeded its peak…and it has mostly outlived its real usefulness to anyone alive in 2011.

I thought since we are talkin about government waste this would not be too far off topic.

Geochelone on January 26, 2011 at 5:05 PM

That’s insane. Last week I got awful salmonella poisoning from the local supermarket — their rotisserie turkey was undercooked. I told the store manager. He apologized and gave me a $20 gift card. I didn’t want to press it further. I don’t want to be a taker, if I can help it. Apparently Congressman Kucinich doesn’t mind being a taker.

To add to the ongoing discussion here on Social Security, I am 30 (it really does suck turning 30), and I would love a private option as would most people my age. I don’t expect SS to even be around by the time it comes for me to collect and I don’t think it should be around for anyone under 40 years old.

It’s my understanding that the Ron Paul cuts totalling 500 billion include eliminating the EPA, and cutting the DOE and FDA down to practically nil. If the plethora of executive “agancies”, unconstitutionally set up to begin with, were dismantled, then why would there be a need to worry about dismantling or deep cuts to SS and Medicare?
Why should SS and Medicare be on the table and not the executive branch power tripping, deficit exploding, unconstitutional agencies?

Ron Paul has the right idea in going after the sacred cow agencies. I don’t think Paul Ryan has even gone near it.

When Congress looked at this in the 1980’s and announced that the system wouldn’t last to 2050 I knew, right then and there, it would not last to my ‘retirement’. By 1990 it was 2030. By 2000 it was 2020. The thing went into the red last year and will not come out of that… there are not enough people to pay IN to the system for each of those getting paid FROM it. It was great when 6 or 7 workers supported one person on SSA… now its just around 2 workers per person on SSA and that without the Boomers retiring en mass.

That is a Ponzi scheme.

Your money isn’t in any ‘account’: it is a wealth transfer payment from the young and relatively poor to the older generation who is relatively well off.

If you believe that you have ‘paid into the system’ and have an ‘account’ are you then prepared to say: ‘When my account is drained I will not take one more red cent from this system?’

You did ‘pay into it’ and you do get a statement telling you what’s ‘in’ the account… why should you continue to get payments after the ‘account’ is gone? That was what you paid into it, why do you deserve more?

Are you really prepared to do that when you get into your 70’s? Go back to work? For that is the logic of ‘paying into the system’, now, isn’t it? Save that there is no ‘account’ just numbers sent to you on what you paid in… that money was spent the day it got there.

SSA is a Ponzi scheme.

A scam.

You have been lied to for decades and willingly accepted those lies. Unless you have structured your life, your finances and every other thing in your life to not expect a penny from SSA. Then you are thinking like an independent American unwilling to take from your fellow citizens no matter what the rhetoric is around SSA. It isn’t hard to do… you just have to re-order your life to suit your means and live within them while preparing for your own future. So you may not get out as often, have as much junk in your house, and need to stock up on the necessities of life because the haul is long and sugar daddy USA is broke. Are you broken to those payments yet and a slave to the system? Or are you willing to pay the cost of being free because it is your life, and the gravy train of forever is grinding to an abrupt halt. Only you can prepare for the future. I wouldn’t do any depending on any government to ‘help’ you do so.

The GOP is fighting a multifront war for public opinion. Until the flanks are secured, it cannot go on the offensive in the center. The Dems are very good at nibbling at the flanks.

Unfortunately, the Dems are playing the role of a barbarian horde which can gain favor with the populace by promising to let the good times roll. It’s not until afterwards that people realize that the barbarians create their bonfires by burning people’s villages and fields. Then they blame the responsible people because they don’t want to admit their own gullibility.

Well, it’s this way, Allahpundit. I had a good retirement setup. The nation has seen fit to allow laws to be enacted with no reaction to repeal them which led directly to my retirement being about 1/4 to 1/10th what it should have been.

I lost a major chunk in the dot bomb, arguably inevitable. I lost the majority of it to the damn CRA related crash. So I damn well NEED that Social Security income if I am going to make ends meet. That, unfortunately, means my children either pay through taxes or pay directly to help keep me alive in a traditional family setting.

Despite all that, IF all Federal government except the specific Constitutional mandates of defense and foreign policy are trimmed I am willing to accept some trim in my Social Security and Medicare. (And trimming the State Department of all foreign aid funding and UN funding seems like it should happen before Social Security and Medicare get trimmed. A decade ago I would probably have said, “Go ahead and trim and raise retirement to 70 or even more. I have my investments for my real retirement.” But the government, elected by “we the people” saw fit to screw me over. So I am FAR less willing to get trimmed again, now. Furthermore, the trimming was done with the benefit of people well younger than me not thinking through the consequences of their actions. Let them freaking pay for it, now.